Social Media Strategies In Small Businesses

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Social Media Strategies inSmall BusinessesFinal ReportMarch 2014Jackie Carter, Centre for Enterprise, MMU

ContentsSocial Media Strategies in Small Businesses . 4Executive Summary. 4Use of Social Media. 4Social Media Strategies . 5Champions of Social Media . 6Impacts of Social Media . 6Introduction . 7Background . 7The move from Internet use to use of Social Media. . 7Classification of Social Media. 8Social Media Research – Strategies and Impact Measurement . 8Use of social media in businesses . 9Factors affecting the use of social media . 10Champions . 11Aim, Objectives and Scope. 11Methodology. 12Secondary data from Advantage West Midlands (AWM). 12Semi-structured interviews with six businesses in the North West. . 12Discussion. 14Secondary Data Analysis . 14Business Activities . 14Semi-Structured Interviews . 15Use of Social Media . 15Social Media Strategy. 18Champions . 21Impact Monitoring . 22Conclusions . 23Use of social media . 23Strategy . 23Champions . 24Impact/Monitoring of Social Media . 24Limitations of the Research and Suggestions for Further Research . 24Glossary . 25Page 2

References . 26Appendix 1: Interview Guide. 28Page 3

Social Media Strategies in Small BusinessesJackie Carter, Centre for Enterprise, Manchester Metropolitan UniversityExecutive SummaryAn exploratory project has been carried out with a number of small-to-medium enterprises (SMEs)to investigate the use of social media by SMEs. Previous research has highlighted the need for moreinvestigations into the strategies used by businesses in implementing and using social media and infinding out how firms monitor the impact of social media on their business.The objectives of the research were: To review the literature and existing survey data to develop a framework for understandingstrategic approaches to social media use in small businesses, from the perspective of thebusiness owner-manager;To gain further insights through interviews into social media strategies developed by smallbusinesses;To examine the extent to which small businesses using social media are monitoring theimpacts of social media use on their business;To investigate the evolution of attitudes and strategic approaches to social media in the newdigital economy.A literature review was carried out and is detailed in the Background section below.The project used mixed methods by first analysing secondary data on social media use in SMEs in theWest Midlands, obtained in 2003. This was used to generate questions for semi-structuredinterviews.Six semi-structured interviews were carried out with SMEs, based in the North West of England. Theinterviews took place in small businesses with less than 50 staff and were taken from a range ofbusiness sectors. The interviews explored four subject areas: Use of Social MediaSocial Media StrategyChampions of Social MediaImpacts of Social MediaThe results of the interviews are summarised and discussed below:Use of Social MediaTwitter was the most widely used form of social media, used by all the businesses in this survey andfor a variety of purposes including making customers aware of technical issues, provision ofknowledge to clients, marketing and networking. Twitter was valued for its highly interactive nature.Facebook was not widely used by business-to-business based sectors as it was seen as too social andconsumer focused. However, it was widely used by those businesses which sell products andservices directly to consumers such as those in the Food & Drink sector.Page 4

All the businesses interviewed had adopted a strategy of carrying out at least daily updates on socialmedia.The interviews also found that participants appreciated the benefits of using social media for a rangeof business purposes and not purely for sales and marketing. Some activities discussed included theuse of Twitter for networking with businesses, use of LinkedIn for recruitment of staff and the use ofTwitter to make customers aware of service interruptions.There was some interest by participants in social media sites, which focused on photos such asPinterest and Tumblr as these were seen as a useful way of promoting businesses. Severalbusinesses had started to use Google and identified this as useful due to the associated reviewsand search engine optimisation. Other participants were interested in Google as an opportunity touse a new platform.In the majority of the organisations interviewed, all of the staff did not have access to social mediafor business purposes. Several reasons were identified for this and included other workrequirements preventing staff from actively participating in social media use. Other suggestionswere reluctance of staff to use social media for fear of saying something inappropriate about thebusiness and lack of familiarity with social media in some staff members.Social Media StrategiesAll of the participants in the research had adopted a strategy of devoting time to making regularposts on social media with tailoring of the content of posts to suit the social media platform and thetarget audience.The quality of posts on social media was important to participants. All the participants felt that itwas important to offer clients free knowledge and expertise through social media e.g. provision ofwhite papers and technical articles that might be of benefit to clients. Two of the participants alsohighlighted the need to be able to offer informed opinions to clients on developments and activitieswithin their sector.The importance of a two-way dialog between the business and their clients was discussed andbusinesses often mentioned the need to avoid using social media for material, which only promotedtheir organisation and did not allow discussion with clients.Two of the participants described the importance of using social media for networking and forgaining knowledge.Advertising on social media was viewed with some suspicion by several respondents and most hadnot developed any strategy of using social media for advertising.It was recognised that an investment of time was required to support social media strategies butwith only one exception none of the businesses were able to appoint a full-time member of staff tocarry out duties relating to social media. The need to have a strategy of monitoring social mediaoutside of regular office hours was also highlighted by two of the participants. Time saving strategiesPage 5

such as scheduling a program of Tweets on Twitter during the day were often used to reduce thetime required in managing social media.In half of the six organisations interviewed, managing social media use was the responsibility of themarketing manager.Despite trying to adopt strategies for social media use, two of the businesses identified that a degreeof experimentation with social media was useful. This allowed participants some flexibility to trynew or different social media platforms and determine which platforms worked best for thebusiness.Champions of Social MediaThe three interviewees in the role of marketing manager considered themselves to be formalchampions of social media within their organisations. One of the businesses interviewed made useof an informal champion in the form of a colleague with a greater knowledge of Twitter. The otherparticipants in the study made use of other methods for advice and support in using social mediasuch as working with a consultant, formal training courses and studying reports posted on socialmedia.Impacts of Social MediaMost of the businesses in the survey made use of analytics tools to track whether social mediaresulted in conversions to customers. However, three of the businesses described the difficulty ofeffectively monitoring how social media interaction converts to value for the business.Page 6

IntroductionIt is widely accepted that more research into the use of social media technology by businesses isneeded (Andzulis et al., 2012), (Aral et al., 2013), (Kim et al., 2013).Social media offers an opportunity for an unprecedentedly high number of social interactions for abusiness or individual (Fischer & Reuber, 2011). However, businesses have been found to be slowerthan consumers to adopt social media. This is found to be the case, despite the high growth inconsumers using social media and the identified advantages of using social media e.g. strengtheningof customer relationships (Andzulis et al., 2012), (Ashworth, 2011).This project explores an under-researched area of social media use in small to medium enterprises(SME), namely development and implementation of a social media strategy, together withsystematic monitoring of the outcomes (Aral et al., 2013). In this report the use of social media insmall businesses, based in the North West will be examined particularly the strategies used by theseorganisations, use of champions to promote social media in the business, and their monitoring of theoutcomes of using social media.The structure of this report is as follows: The next section reviews the literature on social mediaadoption and strategies by small businesses, including discussion on the influence of champions.The sample selection and methodology is then described, followed by discussions of the findingsfrom the research. Finally, conclusions, recommendations and identification of future researchtopics are outlined.BackgroundThe move from Internet use to use of Social Media.There has been an evolution from the use of a simple web page to provide information about abusiness or product, to the use of the Internet for commerce. In recent times the development ofWeb 2.0 technologies have enabled the creation of social media content (Kaplan & Haenlein, 2010),(Berthon et al., 2012). Kaplan & Haenlein (2010) define Web 2.0 as the technological platform forsocial media. Web 2.0 is not a specific set of technological advancements but certain technologiessuch as Adobe Flash and Really Simple Syndication (RSS) are required to facilitate the creation ofsocial media.The term Web 2.0 describes the technological advances in computer hardware and software thathave allowed computer users to create content, interact with other users and facilitateinteroperability. For example, user-friendly interactive websites provide richer content to users andencourage participation. There is a shift in the role of the computer user from a passive role such asretrieving information from the Internet to a role that involves interacting as part of a community,information creation, design and collaboration (Berthon et al., 2012).Social media applications such as YouTube, Facebook, Twitter, Flickr and Wikipedia are used to carrysocial media content. The content of social media consists of text, pictures, videos, networks(Berthon et al., 2012). The term User Generated Content (UGC) is often used to describe thecontent that has been generated by users using the various social media applications availablePage 7

(Kaplan & Haenlein, 2010). Social media is easy to access and accessible for large numbers of users(Berthon et al., 2012).Classification of Social MediaThere is no definitive way to classify social media (Fischer & Reuber, 2011). Fischer & Reuber (2011)have classified social media by application type into social networking applications such as Facebook,social bookmarking, video-sharing e.g. YouTube, picture-sharing e.g. Flickr, professional networkingsuch as LinkedIn, user forums, blogs and microblogging applications such as Twitter. Several authorshave made use of the classification proposed by Kaplan & Haenlein (2010). Kaplan & Haenlein (2010)classified social media into six categories: collaborative projects, blogs, content communities, socialnetworking sites, virtual game worlds and virtual social worlds.The social media within the categories described by Kaplan & Haenlein (2010) offer potentialopportunities for businesses with some disadvantages. The benefits and threats of social media forbusinesses will be described in more detail below.Social Media Research – Strategies and Impact MeasurementAral et al. (2013) suggest a research framework for future research into the application of socialmedia in firms and industries (Table 1). Their framework breaks the research into the areas ofDesign and Features, Strategy and Tactics, Management and Organisation and Measurement andValue. Aral et al. (2013) highlight several areas, which would benefit from further research andfurther research in Strategy and Tactics and Measurement and Value are described below.One area highlighted by Aral et al (2013) is the lack of measurement methodology for monitoring theimpact of social media use on a business. Barnes (2010) plans to measure the return on investmentof implementing social media in future longitudinal surveys. In her survey most of the businesseshad measured the success of social media using the number of hits on the social media site,comments on the site, leads or sales as measurement indicators.Fischer & Reuber (2011) also state that there has been limited research to measure the impact ofthe use of social media on a business. The limited research available is mainly in the business area ofmarketing. These authors provide evidence that entrepreneurs are making increasing use of Twitterand highlight the need for further entrepreneurship research to identify the impacts of this.There is a lack of research on firms’ social media strategies and how these fit into the overallstrategy of a business. Aral et al. (2013) state that this is an area that should receive more researchfocus as there is currently a low understanding of how companies should manage their social media.This view is also supported by Ashworth (2011) who highlights the lack of research into SME ebusiness and social media strategies. Aral et al. (2013) found a lack of industry specific best practicesavailable for companies. They suggest that strategies are required to provide a moreinterdepartmental approach for customers, with attention to contributions from customers andhandling of negative perceptions of a company by customers. Fischer & Reuber (2011) also suggestthat social media expertise should be viewed as a subset of business expertise. However, they alsofind a lack of guidelines available for firms and feel that expertise in social media is not yet fullydeveloped in businesses because social media has only been available for a limited time period andsocial media continues to evolve.Page 8

Table 1 An Organizing Framework for Social Media Research (adapted from (Aral et al., 2013) to show research relatingto Firms and Industries only)Firms andIndustriesDesign andfeaturesHow should firmsinteractwith specificplatformfeatures tomaximize theirbenefit?What featuresshould firmsdesign intotheir home-grownsocialmedia initiatives?Strategy andtacticsWhat types ofsocial mediainitiatives workbest for whatfirms?How should firmsinteract withpublic socialmedia?Whatcombinationsof home-grownand publicsocial mediainitiativesshould firmspursue?Howshould firmsrespond tosocial mediacrises?Management andOrganizationHow shouldcompaniesorganize, govern,fund, andevolve their socialmediacapabilities?What skill andculture changesare neededto best adapt to asocialworld?Which skills,talent, orhuman resourcesshouldfirms develop?How shouldfirms createincentives toguide socialmedia activities?Measurementand valueHow do wemeasure theshort- and longtermbottom line andintermediateoutcomes ofsocial media forfirms?How do socialmedia addvalue to firms?Whatindustry-wideefficiencieshave been (canbe) attainedvia social media?Use of social media in businessesResearch often focuses on use of social media in sales (Andzulis et al., 2012) and marketing(Berthon et al., 2012), (Ashworth, 2011), (Barnes, 2010). Often one department e.g. marketingwithin a firm is responsible for implementing and use of social media but Aral et al. (2013) state thatcustomers do not view firms in terms of departments and expect responses to a range of commentsand enquiries raised using social media such as technical enquiries, ideas for improving a productand expressions of support for a product. Kietzmann et al. (2011) suggest that “customer service isthe new marketing” and propose that firms should focus their social media strategy on customersatisfaction through processes such as customer complaint resolution and responding to customersuggestions for product or service improvements.Research by Fischer & Reuber (2011), examining the use of Twitter by entrepreneurs, demonstratesthe potential for social media to be used in many more contexts within a business than purely inmarketing.In her research into the use of social media by SME fashion e-retailers in Greater Manchester,Ashworth (2011) found that motivation to implement social media technologies was high among theretailers with benefits such as building stronger relationships with the customer, and being able togather intelligence about customers cited as benefits of using social media. The inhibitors found inthis study were the lack of staff resources available to implement a social media strategy and alsoPage 9

the unknown potential of social media when starting to implement this into a business. Staffresources were also cited as a barrier to using social media in a longitudinal survey of top USbusinesses conducted by Barnes (2010). This study also found legal restrictions presented a barrierto some of the US businesses in using social media. Small businesses in Malaysia feared cybercrimefrom doing business using social media Kahar et al. (2012). These barriers to the use of social mediamay be culture and country specific.Factors affecting the use of social mediaThe widespread use of social media by the public can have implications for the organisationstructure of a business as social media has allowed a shift to a consumer driven environment(Berthon et al., 2012). Anzulis et al. (2012)report that customers now demand instant responsesand contact from those businesses that they use. Customers demand a forum to deal with multiplerequests such as customer concerns, loyalty rewards for customers continued use of a business orbrand, special offers not available to the public or other businesses, updates on why products orservices may be changing and additional information on products. Customers now demandimmediate responses with no international boundaries or consideration of time zones (Berthon etal., 2012). Some larger businesses have made changes to their organisational structure toaccommodate these new requirements for customer interaction (Fischer & Reuber, 2011). This maybe more difficult for a smaller business to incorporate into their operations.Kaplan & Haenlein (2010) and Barnes (2010) state that using social media can be low cost and havehigher levels of efficiency that using traditional communication methods. This could make socialmedia an effective tool for small to medium enterprises (SMEs). Kaplan & Haenlein (2010) predict amove to mobile social media in the future with the majority of users accessing social media throughmobile devices. This is likely to increase public access to social media.It can be difficult for companies to manage the use of social media as this is a fast-movingenvironment with social media applications becoming popular but then being replaced by newproducts (Kaplan & Haenlein, 2010). This paper highlights the importance to businesses ofdeveloping a strategy when using social media.There is also potential for damage to a company’s reputation due to the shift in power from thecompany to an individual using social media. Kwok & Yu (2013) state that consumers of tourism andhospitality products often rely on online reviews from other customers e.g. reviews of restaurants,hotels or holidays before making bookings. Consumers believe that reviews from other customersare more trustworthy than those posted by a business. Berthon et al. (2012)and Kietzmann et al.(2011) provide the example of an instance where an unacknowledged customer complaint was giveninternational exposure by a consumer using social media in the form of a YouTube video. The firminvolved was not adequately prepared for this situation. Products which have been alleged to bepoorly performing or dangerous can be highlighted by consumers using social media. Several largecompanies have implemented organisational changes to manage this threat by employing staff tomonitor social media and respond instantaneously to customer complaints (Fischer & Reuber, 2011).Unsustainable or unethical practices carried out or alleged to have been carried out by a companycan also be exposed by campaign groups and consumers using social media such as blogs and wikis(Berthon et al., 2012), (Kaplan & Haenlein, 2010). Social media also presents the risk of copyrightviolations, for example, users may share copyrighted materials on content community sites such asPage10

Flickr, YouTube and Slideshare (Kaplan & Haenlein, 2010). There is also some risk to a company’sreputation from staff members use of social media, for example if there is conflict in a firm betweenstaff and management (Barnes, 2010). An example of this is damage to an organisation using socialmedia occurs when dissatisfied members of staff promote a negative image of a company usingblogs (Kaplan & Haenlein, 2010). However Kaplan & Haenlein (2010) have also found cases wherestaff are blocked from accessing the social media that their company uses whilst at work. Barnes(2010) found that some US businesses had implemented a formal policy to give staff guidelines onthe use of company blogs.Fishcer & Reuber (2011) found in their research into Twitter use by entrepreneurs that moderateuse of Twitter for social networking benefitted entrepreneurial outcomes. However, many of therespondents felt that overuse of social connections on Twitter led to feeling overwhelmed by theinformation received and could lead to being distracted from their work.Carmichael & Cleave (2012) also suggest a worst case scenario that use of social media foradvertising by firms may be seen as an intrusion for users of social media sites and reduce the valueof these sites to participants. This was not found to be the case in their small case study of Facebookusers. In contrast, Fischer & Reuber (2011) confirmed this possibility as they found that blatantproduct promotion was not acceptable in social media communities of entrepreneurs using Twitterand could result in loss of social contacts on Twitter. The use of this social media by entrepreneurswas more focused on relationship building rather than on advertising.ChampionsSchon (1963) described resistance to change within an organisation when faced with a newinnovation. He found that a champion was key to the success of a new idea. Fichter (2009)described promotor theory, which describes the need for innovation projects to overcome barriersand the requirement of a promotor to help to overcome these barriers. In this theory barriers toinnovation can occur due to several factors such as lack of knowledge in a firm, resistance to theinnovation, administrative barriers and lack of co-operation. It is possible to have several promotorroles within a firm to overcome these barriers. A “universal promotor” or champion takes onmultiple roles to overcome barriers to innovation.Rogers (2003) described innovation champions as risk takers and innovators, possessing people skillsand negotiating skills. Whilst champions were identified as influential people in an organisation,Rogers (2003) found that champions were not always the most senior members of staff within theorganisation. Schon (1963) found that champions were mainly existing staff in an organisation ratherthan staff recruited specifically to champion a product or innovation.Bayo-Moriones & Lera-López (2007) highlighted a lack of research into technology adoption in smallfirms. They found, through case study based research, that adoption of new technology was oftendriven by the growth of the firm and found that a champion was in place in many small firms.Aim, Objectives and ScopeThe aim of this project is to develop an understanding of strategic approaches to social media use inSMEs by exploring the experiences of businesses in the North West of England. The objectives are:Page11

To review the literature and existing survey data to develop a framework for understandingstrategic approaches to social media use in small businesses, from the perspective of thebusiness owner-manager;To gain further insights through interviews into social media strategies developed by smallbusinesses;To examine the extent to which small businesses using social media are monitoring theimpacts of social media use on their business;To investigate the evolution of attitudes and strategic approaches to social media in the newdigital economy.MethodologySecondary data from Advantage West Midlands (AWM)Secondary data was available from a survey on social media use in small businesses conducted in theWest Midlands in 2011. This survey explored the use of social media in 271 small businesses during2011 and included data about attitudes and approaches to implementing its use. Secondary data canoften be of benefit to researchers, for example use of secondary data can result in a reduction in thetime required to gather data (Saunders et al., 2007), (Hakim, 2000). However, secondary data canoften only partially address research objectives and may no longer be current. It is often beneficialto combine the use of secondary data with primary data (Saunders et al., 2007) This survey data wasanalysed to provide information on social media use in small businesses examining the data usingSPSS. The themes from the secondary data and from the literature described above were revisited indeveloping the interview themes for the semi-structured interviews described below. Theseprovided more up-to-date data on the use of social media in small businesses.Semi-structured interviews with six businesses i

Use of Social Media Social Media Strategy Champions of Social Media Impacts of Social Media The results of the interviews are summarised and discussed below: Use of Social Media Twitter was the most widely used form of social media, used by all the businesses in this survey and

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